Stock Market 101 - PDF by junglesister


									                      21st Century Learning
                     Money 101: Stock Market
                        Curriculum Guide


Stock market – a place in which shares of stock are traded

Share – a portion; owning part of a company

Stock – a share of ownership in a business

Capital – money

Traded (in terms of the stock market) – bought or sold

Ticker symbol – abbreviation for a company’s name

Brokerage – companies that charge a fee to buy and sell an investor’s

Broker – someone who invests your money

Activity 1: Understanding Concepts of the Stock Market?
The following is a simplified scenario that explains the basic concepts of stocks,
shareholders and risks. Explain to students that this will allow them to explore just the
foundational concepts of the stock market. Students are likely to begin thinking beyond
this scenario as they participate in the activity.

Share the following scenario with students:

Anita wants to set up a lemonade stand, and sell fresh squeezed lemonade. She has
$10.00, which covers the cost of lemons, sugar and ice. However, she will also need a
pitcher and cups (equipment). Anita does not have enough money to cover all of her

Susan and Micah say they might pay for the pitcher and cups, if Anita shares her profits
with them. (This would be like buying stock in Anita’s company.)

Anita readily agrees, so Susan and Micah must to decide if they think it is a good
investment. All investments are risks, but there are a few variables Susan and Micah
can consider before they purchase this “stock” in Anita’s company.
The pitcher and cups cost $5.00, so Susan and Micah will each invest $2.50. $2.50 is
16.5% of $15.00, so 16.5% of total profit is the return they would each get on the profits
made by Anita.

Work in pairs or groups of 3-4. Discuss all factors and options you might consider if you
were Susan and Micah.

Here are the facts:

The lemonade stand will be:

   •   Run by Anita
   •   Open 2 days
   •   Located at the city park

Here are some factors to consider. As your group discusses, add new variables to the

Shareholder Risks:
  1. How much money is this business likely to make?
  2. How much profit is necessary to make it worthwhile as the stockholder?
  3. How much must each glass of lemonade cost to make this profit? Is that
  4. Is it possible the lemonade stand will lose money?

Create a short scenario of how this might play out if Susan and Micah invest in Anita’s
company? How well does the company perform? Was it a good investment for Susan
and Micah? Use exact amounts of money in your description. You will present your
scenario to the class, so you can describe the scenario in essay format, bulleted points,
or illustrations.

Teacher Notes:
Here are some sample scenarios:

   •   It rains that day, and Susan and Micah lose their money.
   •   Anita makes $50 total = $35 profit so Anita gets $23 profit and Susan and Micah
       each get $5.70.
   •   There is a huge family reunion that day at the park, and Anita makes $100 so
       Anita gets $56 and Susan and Micah each get $14.
Students can use what they learned in this simplified example to understand the
stock market activities on the following web pages.

Activity 2: Adding on to Our Understanding

Use the following website to expand your knowledge of the stock market.

Activity: Read the page together. Use the T-chart at the end of this lesson to compare
the simplified lemonade stand scenario (above) to the information gained from this

Activity 3: Elaborating with Real World Examples:
Use the following website and activity to continue your discussion with students about
the stock market and to further elaborate on their understanding of how the stock
market works.

Activity 4: Applying Our Understanding of the Stock Market
Use the following website to learn how to read the stock market pages in the
newspaper. Learning how to read the Stock Market Pages:

Additional Websites;


Young Investor
         Building Our Knowledge of the
                  Stock Market
Lemonade Simplified         Real-World
    Scenario                Explanation
     Teacher Notes:
     Possible Answers

                    Lemonade                 Real-world
                    Simplified Scenario      Explanation

Possible answers:          One-time          Businesses are
                           business (only    ongoing so
                           open 2 days)      shareholders may
                                             make money over
                                             several years

                           Lemonade stand    In real world, businesses
                           was a start up    may be in business for many
                           business with     years so potential stock
                           more risk         holders can research
                                             patterns of success/failure
                                             before investing

                        Susan and Micah       Susan and Micah
                        may lose all their    could keep their
                        money with not        stock and make a
                        chance to make it     profit the
                        back                  following year or

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